Supply and Demand – End of Chapter Problem Suppose the demand curve for coffee is represented by QD = $100 – P + 0.01 I and the supply curve for coffee is represented by QS = P. Assume the consumer's income is $2,000. a. What are the equilbrium price and quantity? pE = $100 and QE = 20 pE = $60 and QE = 60 %3D pE = $120 and QF = 120 b. Calculate the price elasticity of demand at equilibrium. ED c. Calculate the income elasticity of demand at equilibrium. EP = d. True or False. At equilibrium, coffee is a normal good.

Supply and Demand – End of Chapter Problem Suppose the demand curve for coffee is represented by QD = $100 – P + 0.01 I and the supply curve for coffee is represented by QS = P. Assume the consumer's income is $2,000. a. What are the equilbrium price and quantity? pE = $100 and QE = 20 pE = $60 and QE = 60 %3D pE = $120 and QF = 120 b. Calculate the price elasticity of demand at equilibrium. ED c. Calculate the income elasticity of demand at equilibrium. EP = d. True or False. At equilibrium, coffee is a normal good.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 8PA

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